It's a very good engine for a minibike. You just have to gear it right. My 3.5HP engines haul my 250lbs around even on grass. They just aren't speed demons. The teal bike in my avatar has a 3.5HP Tec on it. I would have bought that engine in a heart beat. It looks like it has been taken care of. Change the oil regardless of what it looks like before you run it too much more.
Doc